Travel search is changing and understanding traveler inspiration is becoming increasingly important.
Either get closer to potential customers before they have made up their mind, or let someone else do it and watch the leisure traveler of tomorrow bypass completely the transactional websites that dominate travel today.
Below are the five challenges that industry participants will need to complete in order fully understand this evolving model of travel inspiration and search.
Challenge 1 - Treat transactional with trepidation
Supplier direct websites (be that for cars, hotels, airlines or any travel industry participant with a direct sales channel) have traditionally been very transactional, and for good reason.
In most cases the brand has historically been sufficient to lure customers who were ready to purchase then and there.
But things are changing - brand loyalty amongst online leisure travelers is declining, online travel agency conversion is increasing whilst airline direct is decreasing, and the growth in OTA’s across all regions in 2009 was impressive to witness. In a year in which the industry declined by 5.5%, OTA’s increased by 13%.
Customer travel search patterns are becoming more volatile and the transactional crowd must now view business through a wider lens; seeing not only what happens once the traveler arrives at the site, but also be looking out for that potential buyer long before he or she is ready to demonstrate commitment through purchase.
To set the scene for a better understanding of travel inspiration, I intend to use The Bow Tie Model. This model has been discussed widely within the travel industry since its inception just over a year ago, but the focus was always on ancillary revenue.
Ancillary by it’s nature must come after the initial transaction or else what is it actually ancillary to! Therefore interest has always been slanted to the right of the knot.
The knot is the point at which the traveler has narrowed down all destination, date and price options to one, and has just hit the purchase button. This is the point at which commitment is first locked in.
Today we will look in the opposite direction and use the Bow Tie to understand supplier direct websites targeting customers looking for inspiration. Here is the Bow Tie Model from May 2009.
Ancillary revenue is great, but if you don’t make the original sale then you have very little scope to sell the add ons.
Today we always think of air as the initial point at which the commitment is first made and the payment is first taken, but is it too wild a thought to imagine this model being flipped on its head?
If the airline websites do not adapt from their current transactional focus, then for a reasonable percentage of the leisure market, could air actually be the ancillary product sold in future? It happens today with cruise, so maybe this idea is not so crazy after all.
Whatever happens, it is becoming clearer that a total reliance on waiting for leisure passengers who know exactly when and where they want to go will become a more difficult stance to successfully maintain in future than is has been to date when brand was enough of a hook to book.
When interviewed about this article, Bob Offutt from PhoCusWright says in relation to travel inspiration: “I don’t think anyone has done it right yet….[there is] a huge gap there.”
Moving out of the purely transaction mindset is the first step toward incumbents being in a position to close this gap.